Galp Refining Margins Nearly Triple in First Quarter as Persian Gulf Crisis Supercharges Sines Refinery
Portugal's Largest Energy Company Reports 164 Per Cent Jump in Refining Margins While Oil Production Hits 129,000 Barrels Per Day Galp, Portugal's largest energy company, has reported a dramatic surge in refining margins during the first quarter of...
Portugal's Largest Energy Company Reports 164 Per Cent Jump in Refining Margins While Oil Production Hits 129,000 Barrels Per Day
Galp, Portugal's largest energy company, has reported a dramatic surge in refining margins during the first quarter of 2026, with the metric nearly tripling to USD 14.8 per barrel of oil equivalent — up from USD 5.6 in the same period last year and more than double the USD 6.9 recorded in the fourth quarter of 2025.
The figures, published on 13 April in Galp's provisional 1Q26 Trading Update ahead of full results on 27 April, show how the escalating conflict in the Persian Gulf has reshaped the economics of European refining. The Strait of Hormuz crisis, which has disrupted roughly 20 per cent of global seaborne oil flows since late 2025, has driven up crude oil prices and widened the spread between raw materials and refined products — the core measure of refinery profitability.
Sines Refinery Ramps Up
Galp's Sines refinery, the only refinery in Portugal and one of the largest on the Iberian Peninsula, processed 18.7 million barrels of oil equivalent in the first quarter — an 89 per cent increase from the previous quarter's 9.9 million barrels, though still 14 per cent below the 21.7 million barrels processed in Q1 2025. The quarter-on-quarter jump reflects a recovery from planned maintenance that had constrained throughput in the final months of 2025.
Oil products supplied to the market reached 3.5 million tonnes, roughly flat compared with a year earlier but up 16 per cent from the previous quarter.
Upstream Production Surges 23 Per Cent
In the upstream segment, Galp's working interest production climbed to 129,000 barrels of oil equivalent per day, up 23 per cent year-on-year and 14 per cent quarter-on-quarter. Oil continued to account for 87 per cent of the production mix, with the remainder coming from natural gas. The growth is driven primarily by Galp's deepwater operations in Brazil, where its stakes in the Santos Basin pre-salt fields continue to ramp up.
Natural Gas and LNG Trading Volumes Surge
Natural gas and LNG supply and trading volumes jumped 42 per cent year-on-year to 18.0 terawatt-hours, with the pure trading component reaching 12.7 terawatt-hours — more than double the 6.3 terawatt-hours recorded a year ago. The figures reflect Galp's growing role as a gas trader in European markets, a business that has expanded rapidly since the energy crisis of 2022.
Commercial Segment Steady
On the commercial side, Galp's client sales of oil products remained broadly stable at 1.7 million tonnes, up 2 per cent year-on-year. Natural gas sales to clients held at 4.7 terawatt-hours, while electricity sales to clients rose 14 per cent to 2.3 terawatt-hours, reflecting continued growth in Galp's retail electricity business.
Renewables Growth Continues but Prices Plunge
Galp's renewable energy division continued to expand, with installed capacity steady at 1.7 gigawatts and renewable energy sold rising 21 per cent year-on-year to 471 gigawatt-hours. However, the realised sale price for renewable electricity fell sharply — from EUR 71 per megawatt-hour in Q1 2025 to just EUR 23 in Q1 2026, a 67 per cent decline. The drop reflects the well-documented collapse in wholesale electricity prices across Iberia as renewable capacity continues to outpace demand during off-peak hours.
What It Means
The trading update paints a picture of a company riding two divergent waves. On one hand, the Persian Gulf crisis has delivered a windfall to Galp's refining and upstream operations, with margins and production both at multi-year highs. On the other, the very success of the renewable energy transition is compressing electricity prices to levels that challenge the economics of solar and wind investments.
Galp's full first-quarter results will be published on 27 April before the opening of Euronext Lisbon. The company's shares have risen approximately 18 per cent since the start of the year, buoyed by higher oil prices and the refining margin expansion.
Source: Galp 1Q26 Trading Update, published 13 April 2026
